Unfortunetly, this practice does happen in Asia...anything to create a new "buzz" about discus. And yes, they do cut the tails off. They do it typically between the sizes of 1/2"-3/4" when they are still very young and developing. I have actually had several tailess discus fry come from a few pairs over the years and I can say that they are not affected by it at all. Its kinda cool to watch em swim though. Regardless, there is a difference between mutilation, and a birth defect....which is also how that whole trend started in the first place. Quite sad indeed.
-Ryan